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Reliable electricity supply coming to eastern Kyrgyzstan
Residents of the Issyk Kul area of Kyrgyzstan will soon have a more reliable electricity supply thanks to a US$ 38 million (ECU 31 million) loan from the European Bank for Reconstruction and Development (EBRD). The loan agreement to upgrade the region's electricity transmission network, which will also provide electricity for the Kumtor gold mine, was signed today in Bishkek by Ron Freeman, First Vice President of the EBRD, and Apas Jumagulov, Prime Minister of Kyrgyzstan.
Mr Freeman said: "Upgrading this essential infrastructure in Kyrgyzstan will increase the efficiency of Kyrgyzstan's electricity supply along the southern shore of the lake Issyk Kul, while permitting the most economic development of the Kumtor gold mine. Kumtor is the single largest private foreign investment in Kyrgyzstan and will be a vital source of hard currency revenues for the country."
The Issyk Kul region in eastern Kyrgyzstan, with its two main urban centres of Balykchy and Kara Kol, is currently supplied electricity by a 110 kV transmission ring around the lake. The project seeks to upgrade this network in two phases: Phase I will reinforce the grid with a new 220 kV line from Balykchy to Tamga to ensure reliable supply to Kumtor, and Phase II will extend this line up to Kara Kol, improving the quality of supply to other consumers in the region.
The total project cost is US$ 56.3 million. The EBRD loan will be made to the State Joint Stock Holding Energy Company of the Kyrgyz Republic, with a sovereign guarantee. Kyrgyz authorities agreed to provide the guarantee in recognition of the high priority of the project for the economic development of the country. Proceeds of the loan will be used to finance Phase I of the project and Project Management Advisory Services.
The EBRD is also providing technical cooperation under grant funding to assist in the commercialisation of the Kyrgyz Energy Company. The Kyrgyz Energy Company will be required under the EBRD loan to substantially improve its financial performance and to step up efforts to collect from its customers. The company will utilise payments made by Kumtor for electricity supply to service its debt for this project.
The Government of Kyrgyzstan and the EBRD are seeking parallel cofinancing on concessionary terms for Phase II of the project from the KFW of Germany and the Nordic Development Fund.
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